Beginning in the mid-nineteenth century, the Supreme Court had consistently held that insurance policies were not interstate commerce and that states were free to regulate the industry, including out-of-state companies that wrote policies in their states. However, the U.S. Justice Department sued the South-Eastern Underwriters Association for price fixing under the Sherman Antitrust ActSherman Antitrust Act (1890).Reversals of Court decisions by Congress;South-Eastern Underwriters Association, United States v.[South-Eastern Underwriters Association, United States v.]Commerce clause;South-Eastern Underwriters Association, United States v.[South-Eastern Underwriters Association, United States v.]

By a 4-3 vote, the Supreme found against the underwriters association. In his opinion for the Court, Justice Hugo L. BlackBlack, Hugo L.;South-Eastern Underwriters Association, United States v.[South-Eastern Underwriters Association, United States v.] explained away several precedential holdings, saying they were all state laws and this case turned on a federal statute. He found that insurance companies conducting a substantial portion of their business across state lines were engaged in interstate commerce and subject to the Sherman Antitrust Act. Congress disagreed and passed the 1945 McCarren Act specifying that no congressional enactment should be interpreted as preempting state authority over insurance unless the act specifically asserted federal authority, thereby overturning the Court.

Commerce, regulation of

Federalism

Prudential Insurance Co. v. Benjamin

Reversals of Court decisions by Congress